Study Reveals The One Generation That’s Most Financially Prepared For Retirement, And It’s Not Boomers

When it comes to the reality of retirement, many generations, especially older ones, have come to realize that it doesn’t look anything like the version they may have imagined decades ago. The picture of being able to retire and live comfortably off savings has shifted immensely. But it seems the shaky idea of actually being able to retire has caused one generation in particular to start thinking way more about the money they’re saving for those golden years.

According to a study from investment management firm Vanguard, there is one generation in particular that’s taking steps to ensure they have some financial stability even when they’re no longer able to work anymore. And surprisingly, it’s not boomers. 

A study found that Gen Z is the one generation that’s most financially prepared for retirement.

Vanguard’s study found that Gen Z is the generation most likely to be on track to retire successfully, with 47% of workers aged 24 to 28 currently poised to have enough money to maintain their current lifestyle in retirement. 

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In total, 42% of all U.S. adults are on track to have enough retirement savings, Vanguard found. Generationally, millennials come closest to Gen Z’s preparation with 42% of those aged 29 to 44 on track, followed by 41% of Gen Xers and 40% of baby boomers. 

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Gen Z has been able to rely on ’employer-sponsored contribution plans.’

Vanguard’s study found that the rise of 401(k) and 403(b) accounts and other auto-enrollment plans has made it easier for Gen Z to set aside money in the first place. While boomers did have access to 401(k) plans or pension funds, Gen Z has benefited greatly from knowledge about retirement savings and the growing trend of employers automatically enrolling workers in savings plans.

“[Gen Zers are] automatically enrolled in their retirement plans, and oftentimes the savings rates are set for them, and it escalates with time,” explained Kelly Hahn, Vanguard investment strategist and co-author of the research paper. “There’s a macro factor of the system improving that’s sort of giving them the tailwind.”

Hahn continued, “Gen Z [has] the benefit of the next 40 years of working. If we were to assume that people continue to save into the [defined contribution] programs, as well as saving at a higher rate than we have seen with the older generations, then that only propels the retirement readiness number for younger generations.”

Despite the stereotypes that Gen Z are “lazy” in the workplace and can’t commit to one company, it seems that they’re also the one generation who are actually thinking of their future. While older generations might dismiss them as job hoppers or always demanding better work/life balance, those choices are why Gen Z is retirement-ready: they demand so much from their employers so they can succeed.

Gen Zers have seen and heard firsthand accounts from boomers and Gen Xers in the workforce, and they are determined not to end up like that. Gen Z might be young adults navigating the world during uncertain economic times, but their approach to finances shows they’re playing the long game and planning to win.

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Nia Tipton is a staff writer with a bachelor’s degree in creative writing and journalism who covers news and lifestyle topics that focus on psychology, relationships, and the human experience.